Not yet on track to 17 percent reduction

With the latest round of international climate change talks underway in Doha this week, it’s a good time to check in on the United States’ pledge, made three years in Copenhagen, to reduce greenhouse gas emissions 17 percent below 2005 levels by 2020. Are we on track to meet that?

The short answer: Not yet. But projections depend on assumptions, so let’s look at a few recent projections.

The U.S. Energy Information Administration (EIA) just issued its Annual Energy Outlook Early Release. Its “Reference Case” assumes that current policies will remain in place and that no new state or federal policies are adopted. For example, it does consider the Mercury and Air Toxics Standards (MATS)[2] issued by the Environmental Protection Agency (EPA) in December 2011, but does not factor in regulations for existing fossil fuel power plants that are legally required by not yet proposed. Under this scenario, U.S. carbon dioxide emissions are projected to fall to 5,455 million metric tons by 2020. Considering the most recent EPA projections[3] for greenhouse gas emissions other than carbon dioxide, total U.S. emissions would decline a little less than 5 percent below 2005 levels by 2020 under this scenario.

Last month, the International Energy Agency (IEA) released several scenarios in its World Energy Outlook[4] (WEO). The “Current Policies” Scenario assumes existing policies through mid-2012 continue unchanged through the forecast period. In this scenario, U.S. carbon dioxide emissions would fall to 5,304 million metric tons in 2020, and total greenhouse gases would decline 6.8 percent below 2005 levels. The WEO also ran a “New Policies Scenario” where in addition to existing policies, recently announced policy commitments (including increased fuel standards for medium- and heavy-duty trucks) are implemented. As expected with additional policies, total greenhouse gas emissions would decline more – down 8.6 percent below 2005 levels by 2020.

Because it includes assumptions about future EPA rulemaking, a recent analysis[5] by Resources for the Future (RFF) is much more optimistic about our ability to achieve a 17 percent reduction. RFF concludes that the United States can cut emissions 16.3 percent by 2020 relative to 2005 levels. RFF makes a couple of key regulatory assumptions not included in the EIA and IEA scenarios. First, the EPA would have to finalize regulations for carbon emissions from new power plants. These have been proposed, but not yet adopted, and will likely face legal challenges. Second, EPA would need to adopt greenhouse gas reduction rules for existing power plants. While these could have a big impact on emissions, EPA is unclear about its timetable for promulgating the regulations and, once finalized, the states will have three years to develop plans for their implementation. EPA regulations for new and existing stationary sources contribute 7 percentage points of the 16.3 percent emissions reductions projected by RFF. So while this may be a plausible scenario, it’s by no means locked in.

The U.S. Energy Information Administration and the International Energy Agency project the use of coal will decline to make up around 37 to 42 percent of U.S. electricity production. Natural gas will increase to as much as 27 percent. Nuclear power is projected to remain relatively flat through 2020 at about one-fifth of electricity generation. Renewables are projected to grow from supplying about 10 percent of U.S. electricity to about 15 percent.

It is reasonable to assume that the United States will achieve, conservatively, a 10 percent decrease in greenhouse gases from 2005 levels by 2020. This is based on market trends such as low natural gas prices; improvements in energy efficiency; state policies like California[6]’s cap and trade program, the Northeast’s Regional Greenhouse Gas Initiative (RGGI[7]) and state renewable portfolio standards; as well as existing EPA regulations, particularly for vehicles.

For the U.S. to assert confidently that it is on track to fulfilling President Obama’s 2009 Copenhagen pledge, the administration must at least move forward quickly on regulating emissions from existing power plants. To achieve the steeper reductions ultimately needed to avoid the worst potential impacts of climate change will require much stronger action, such as a price on carbon and targeted incentives for critical technologies. This past year of severe storms, record heat, drought and wildfires tells us that much more than U.S. credibility is at stake.